Kazkommertsbank JSC Net Income dropped on 172% in 2015

29 Apr 2016 • About Kazkommertsbank JSC ($KKB) • By InTwits

Kazkommertsbank JSC reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Kazkommertsbank JSC doesn't have a profitable business model yet: 2015 ROIC is 0.0%
Kazkommertsbank JSC has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's a lot of higher than industry average of 4.8%.
CAPEX is quite volatile: 11,272 in 2015, 6,963 in 2014, 3,257 in 2013, 2,245 in 2012, 4,786 in 2011
The company has potentially unprofitable business model: ROIC is at 0.0%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Kazkommertsbank JSC ($KKB) key annual financial indicators

mln. KZT	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	275,757	276,718	293,413	341,270	482,706	41.4%
Net Income	23,480	-132,510	52,122	21,405	-15,352	-171.7%
Balance Sheet
Cash	105,067	106,497	191,687	192,362	123,908	-35.6%
Short Term Debt	92,215	110,477	97,955	23,059	96,383	318.0%
Long Term Debt	488,486	438,028	393,908	756,469	1,078,313	42.5%
Cash flow
Capex	4,786	2,245	3,257	6,963	11,272	61.9%
Ratios
Revenue growth	-12.7%	0.3%	6.0%	16.3%	41.4%
Net Income Margin	8.5%	-47.9%	17.8%	6.3%	-3.2%	-9.5%
CAPEX, % of revenue	1.7%	0.8%	1.1%	2.0%	2.3%	0.3%
ROIC	1.9%	-9.3%	3.8%	1.3%	0.0%	-1.3%
ROE	4.9%	-35.4%	15.0%	5.9%	-4.3%	-10.2%

Revenue and profitability

Kazkommertsbank JSC's Revenue jumped on 41.4% in 2015.

Net Income marign decreased on 9.5 pp from 6.3% to -3.2% in 2015.

Capital expenditures (CAPEX) and working capital investments

In 2015 the company had CAPEX/Revenue of 2.3%. Kazkommertsbank JSC's CAPEX/Revenue increased slightly on 1.5 pp from 0.81% in 2012 to 2.3% in 2015. For the last three years the average CAPEX/Revenue was 1.8%.

Return on investment

The company operates at low but positive ROIC (0.04%) and negative ROE (-4.30%). ROIC decreased slightly on 1.3 pp from 1.3% to 0.037% in 2015. ROE dropped on 10.2 pp from 5.9% to -4.3% in 2015.

Leverage (Debt)

Debt jumped on 50.7% in 2015 while cash dropped on 35.6% in 2015.

Appendix 1: Peers in Banks

Below we provide Kazkommertsbank JSC benchmarking against other companies in Banks industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Sberbank Of Russia ($SBER)		37.2%	25.1%	23.4%	27.4%
Commercial Intl Bank(Egypt)S.A.E ($CBKD)		37.6%	23.7%	18.9%	26.8%
Yapi Ve Kredi Bankasi As ($YKBD)		14.9%	4.8%	19.7%	25.3%
Mcb Bank Ltd ($MCBS)		3.0%	-1.7%	19.4%	22.4%
Halyk Savings Bank Of Kazakhstn JSC ($HSBK)		3.7%	9.4%	16.3%	19.5%
Median (42 companies)	9.5%	9.3%	4.2%	11.5%	4.0%
Kazkommertsbank JSC ($KKB)			6.0%	16.3%	41.4%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Banque Marocaine Du Comm Exterieur ($69IR)	10.4%	3.7%	9.7%	4.3%	26.8%
Lloyds Banking Group ($LLPC)		8.0%	8.9%	13.1%	13.6%
Banco Santander Sa ($BNC)	2.2%	2.7%	2.6%	8.9%	10.2%
Guaranty Trust Bank ($GRTB)	10.0%	6.7%	6.1%	6.8%	7.7%
Diamond Bank ($DBPA)		8.2%	7.9%	6.0%	6.7%
Median (40 companies)	2.3%	2.4%	2.8%	2.2%	2.5%
Kazkommertsbank JSC ($KKB)		0.8%	1.1%	2.0%	2.3%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Commercial Intl Bank(Egypt)S.A.E ($CBKD)	16.3%	21.7%	26.9%	30.1%	30.3%
Guaranty Trust Bank ($GRTB)	14.2%	19.8%	18.9%	17.8%	16.0%
Mcb Bank Ltd ($MCBS)	18.7%	15.0%	14.4%	15.8%	14.9%
United Bank Ltd ($UBLS)	12.6%	11.7%	11.8%	13.8%	12.6%
Zenith Bank ($ZENB)	13.8%	19.0%	17.6%	15.0%	11.2%
Median (42 companies)	6.9%	6.4%	5.7%	4.5%	3.5%
Kazkommertsbank JSC ($KKB)		-9.3%	3.8%	1.3%	0.0%

Kazkommertsbank JSC stock price chart

Kazkommertsbank JSC financials

mln.	FY2010	FY2011	FY2012

Revenue	315,884	275,757	276,718
EBITDA	0.000	0.000	0.000
Net income	21,879	23,480	-132,510.000
CAPEX	0.000	4,786	2,245
Debt	683,418	580,701	548,505
Cash	61,216	105,067	106,497

About Kazkommertsbank JSC

JSC Kazkommertsbank provides banking and other financial services to corporate and retail clients in the Republic of Kazakhstan, and CIS and OECD countries. It operates in four segments: Retail Banking, Corporate Banking, Investment Banking, and Other. The Retail Banking segment offers private banking services, including private customer current accounts, savings, deposits, investment savings products, custody, credit and debit cards, consumer loans, and mortgages. The Corporate Banking segment provides direct debit facilities, current accounts, deposits, overdrafts, loans and other credit facilities, and documentary credits. The Investment Banking segment offers financial instruments trading, structured financing, and merger and acquisitions advisory services; and foreign currency and derivative products. The Other segment is primarily involved in the insurance operations. The company is also engaged in securities market transactions and management of pension assets; and pension fund, as well as life insurance, insurance of property and cargoes, auto insurance, civil liability insurance of vehicle owners, insurance of other civil liabilities, and reinsurance businesses, as well as provides payment card processing and other related services. As of December 31, 2013, the company had 23 branches in Kazakhstan. JSC Kazkommertsbank was founded in 1990 and is based in Almaty, Kazakhstan.